Seoul shares plunge 3.64 pct on global recession woes

SEOUL, Aug. 9 (Yonhap) -- South Korean stocks nosedived 3.64 percent to a 13-month low on Tuesday as investors were spooked by growing fears over a global economic recession sparked by the first-ever U.S. credit rating downgrade and the persistent debt crisis in Europe, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) tumbled 68.1 points to 1,801.35. Trading volume was heavy at 677 million shares worth 13.3 trillion won (US$12.2 billion), with losers far outnumbering gainers 790 to 97.
At one point, the key index lost a record 184 points to 1,684 points, sinking below the 1,700 level for the first time in 13 months. But it clawed its way back from some of its losses in later trading.
The massive loss prompted the South Korean bourse operator to temporarily suspend program selling on the main stock market for five minutes after the KOSPI 200 futures nosedived more than 5 percent. It also halted trading on the secondary KOSDAQ as the index plunged for two sessions in a row.
"The South Korean economy is very vulnerable to external factors, as it highly depends on exports," said Lim Tae-geun, an analyst at Shinyoung Securities Co. "A tremor in an advanced market takes a heavier toll on the South Korean market."
South Korean stocks have lost nearly 17 percent since the beginning of August.
Since Standard & Poor's downgraded its credit rating of the United States by one notch from "AAA" to "AA+" last week, global stock markets have tumbled on mounting anxieties over a second global recession, coupled with lingering debt issues in the U.S. and Europe.
Finance ministers of the Group of 20 countries vowed to take "all necessary initiatives" to support the world's financial stability.
"The sharp, rapid decrease comes from concerns that the world economy has already plunged into a recession," said Lim. "International cooperation won't boost investors. Only substantial signs showing that the global economy is not that bad would revive the market."
Foreigners went on a selling spree for a sixth consecutive session, selling a net 1.17 trillion won. Institutions and retail investors snapped up shares but were not strong enough to block the decline.
Shares lost ground across the board, with market bellwether Samsung Electronics, the world's biggest memory chipmaker, falling 4.74 percent to 724,000 won, and its smaller rival Hynix Semiconductor ending down 7.55 percent to 20,200 won.
Financials also suffered a great loss as KB Financial Group, the country's No. 2 banking group, lost 4.36 percent to 41,700 won and No. 4 player Hana Financial Group nosedived 6.5 percent to 34,550 won.
The local currency closed at 1,088.1 won to the greenback, down 5.6 won from Monday's close, the lowest in nearly two months since it changed hands at 1,089.90 won on June 16, dealers said.
brk@yna.co.kr